An unstable fcc‐Fe50Cu50 alloy has been prepared by milling of elemental powder blends. The structure and the decomposition behavior of the alloy were studied by x‐ray diffraction and Mössbauer spectroscopy. A broad distribution of different local environments of the iron atoms was observed in the fcc‐FeCu phase. This indicates that Fe and Cu are mixed on an atomic level. In the initial state of decomposition, iron atoms precipitated coherently in the fcc‐FeCu matrix as fcc‐Fe particles. At higher annealing temperatures the particle size increased during the thermal treatment, and the fcc‐Fe precipitates transformed into the bcc‐Fe structure.